An overview of Nike’s business:
Nike, previously known as Blue Ribbon Sports, is one of the most
important brands for sports equipment. There are more than 700 shops around the
world and offices located in 45 countries outside the United States.
Most of the factories are situated in Asia (around 800,000 people
work for them), but actually no product is made under the brand Nike there. The
company has many contracts with local factory owners for the manufacturing.
Nike claims to be in the business of “marketing shoes”, not in producing them,
but it establishes the design, the materials and the price for the different
products.
Nike’s Ethical Commitment:
As the biggest shoe company in the world, Nike describes itself as
an industry leader. Their Code of Conduct states: "in the area of human
rights... in the communities in which we do business, we seek to do not only
what is required, but what is expected of a leader."
Sweatshops - An ethical problem:
Due to some stories about working life in its factories in the
1990’s, the brand has been accused for child labour, bad working conditions,
low wages, and forced overtime. In some cases, there were reports of physical
abuse issues as well as exposure to dangerous chemicals and poor air quality.
Nike used to try to avoid responsibility for factory conditions by
saying they were "just the buyer". But this in fact pointed out
to the media their lack of attention in respecting human rights.
According to the Boston Globe, “Based on interviews with more than
4,000 workers in Indonesia, the report… found widespread verbal and physical
abuse, shockingly high rates of sexual harassment, forced overtime, denied sick
leave, inadequate access to medical care, and two reports of worker deaths”.
The main reason why the company decided to expand its business in
countries like Vietnam, Indonesia and China is due to the fact that there are
no regulations regarding living conditions.
What a Sweatshop Looks Like:
The Educating for Justice group showed that between 50 and 100
percent of Nike factories require more working hours than those permitted by
the Code of Conduct. In 25 to 50 percent of factories, workers are required to
work 7 days a week, and in the same percentage of factories, workers are still
paid less than the local minimum wage.
In Indonesia during 1999 Nike raised the salary to 265,000 Rupiah
(US$30) after the government imposed regulations to increase the minimum wage
per month to 231,000 Rupiah (US$26). Even if the company fixed a salary higher
than the one legally established, the money that it provided its workers were
not enough to guarantee them acceptable living conditions. “If I don’t work
overtime, I can’t survive”, says Baltazar at PT Hasi Nike factory in Jakarta.
He worked an average of 40 overtime hours a week. The idea of someone working
that many hours of overtime a week, just to survive, should not be
acceptable in the twenty first century. In fact, thanks to a study by Global
Exchange, it has been proven that at least 332,000 Rupiah per month are
necessary to provide the basic needs to a person. Due to the fact that each
worker must cover the needs of his family, a minimum of 664,000 Rupiah per
month is necessary. How can that be acceptable when we are talking about Nike,
a company with such high profits that could afford twice the wage without
increasing the price of the product?
Camera crews went into a sub contractors factory, Hytex Apparel,
in Malaysia and uncovered how terrible working and living conditions were.
Recruiters would go into countries like Bangladesh and bring over desperate men
and women that were willing to work in the factory which were promised a
‘better life for both you and your family.’ Upon arrival their passports were
confiscated, and were charged a arrival fee (equivalent to one years pay). If
they wanted to leave they had to pay back their ‘debt’. This was impossible and
therefore they were unable to leave. They were then forced to sign a contract
which was in a different language then their own. Living quarters were 26 men
per room with one common toilet and trough which were connected to the area
where food was made. After this news cast was released Nike was quick to react
and claimed they had not idea under which conditions these people lived. It was
‘unexpected’ and they said they would relocate and move workers. This is only
one example of many factories that supply Nike.
From 1998 Nike made many changes in their factories in order to
improve the health related issues in its plants. They substituted some petroleum
based products with water based ones and provided better training for the
workers, which in the end was not sufficient. The factories didn’t respect the
US Occupational Health and Safety Administration (OSHA) standards: the company
kept forcing its workers to be overexposed to hazardous chemical products, heat
and noise and respiratory problems were still an issue.
Can Child-labor be Morally Accepted?
One of the most debated issue is Nike’s use of child labour in
product manufacturing. Some practices that are unethical in one environment can
be acceptable in another. This means that it might be acceptable for children
in Vietnam to work in factories, while in the United States this is not. As
Cavett Goodwin (2007) already mentioned that there is no set definition of
CSR to which all agents follow. So the question is - is it acceptable for
Nike, being an American based company, to adopt the labour regulations of the
country they operate in? Or should they keep the same standard as home? Is it
ethical to make them manufacture products that will be sold all over the world,
even in countries with different culture and that condemn this practice?
Some experts argued that a possible way to end child labour is to
buy more often whatever children produce. This will mean more products sold,
more revenues for the company and so higher wages for the workers, increasing
the level of income per family and so benefiting the families of the children
as well as the nation.
If the number of goods sold increase, wouldn’t it be more probable
for a company to exploit the idea of using children labour? If sales rise and
the salary of children is very low profits will have a sharp increase. As a
consequence using child labour will turn out to be a good choice and will be
even more encouraged, causing a boost in birth rates, slavery and sweatshops.
If this will be the case, the black market of children will have a big boom,
not leading the children issue to an end.
The Moral Conflict:
Is it unethical deciding to set new plants where costs for the
workforce are lower, or is it ethical if we are doing that in developing
countries? It could be ethical because it encourages investment and improves
living standard conditions. But in the end does this positively affect the
living conditions? Are the low wages only low in comparison to the averages in
the developed countries, or are they very low even for the Asiatic world? Is
this a collaboration with new countries or exploitation?
It is understandable to set new plants in those countries for the
cost advantage, but how can a huge company like Nike decides to start the
business there. Is it because of the few and weak protective labour laws? How
can the fact that the workers can’t form independent trade unions, attract a
business?
We all live in one world. However, across this whole world,
there’s a whole spectrum of religions, cultures, and customs.So what is
acceptable in one country could very easily be considered unethical and
unacceptable in another country. This poses somewhat of a problem to companies
such as Nike. They operate in so many countries across the world in which their
values must be consistent across their whole organisation.
The biggest conflicts arise between the Western countries, in
which cultures are for the most part simila,r and the Asian countries, in which
they have dramatically different cultures. Countries such as Japan, even though
entering the global market and being a big player in globalisation, still have
very unique characteristics on how they do business. Due to different nations
having such unique business characteristics then the ethical views of these
businesses obviously differ. For example bribery is very much illegal and
frowned upon in the Western Nations however in countries such as China this is
widely accepted as a natural part of business (Minxin, 2007).
“In some countries, bribery is part of the fabric of life
and no business can be transacted without it. Without knowing whom to pay to
grease the wheels, companies face frustration and failure” (Pitta et
al, 1999). Managers in companies in the Western world if found to be involved
in bribery would most definitely be fined and face jail time, whereas their
counterparts in Asia may be given a verbal warning or just have the matter
ignored. This makes proper ethics very difficult to define as Nike operates
across all of these countries and therefore must consider all views.
Confucianism is an important part of life in many Asian cultures,
it has had a huge effect in China and its influence has even extended to other
nations such as Korea, Japan and Vietnam. These teachings are centred on how
we should live our lives and relationships are a central part of this
(Religionfacts.com, 2010).
Relationships are hugely important in many Asian countries especially
in business. However, in Western countries relationships are much less
important in business as people are much less collectivist.
The graph here shows that the top three countries in terms of
individualism are America, Australia and U.K. whereas some of the most
collectivist societies are Taiwan, Cambodia and South Korean. These are all
Eastern-Asian countries showing that there is not just a difference in how
these countries do business but also that there is a difference in how people
view everything even the relationships with their family.
Further, we can look at what cultures actually value. As you can
see from the table Japan and the Arab countries are much more about being
together, whereas the US values individualism much more highly.
Age also appears to be a big factor in Japan and the Arab
countries and this doesn’t even get a mention from the USA. (Elasmawi
& Harris, 1993)
The dilemma of managers: Locally adapt or enforcing own values:
Nowadays, most large multinational companies have factory sites in
Asian and other less developed countries in order to benefit from cheap labor
and increased profits. The moral dilemma that many managers face when setting
up a subsidiary in those countries lies in the decision whether to adapt and adhere
to local working and ethical standards, or to employ their own. In some Asian
countries child labor and poor working conditions might be acceptable, but in
the western part of the world people do not appreciate such conditions and
neither should MNCs. As described by Thomas Donaldson (1996), no culture’s
ethics are better than any others’, suggesting that there are no international
rights and wrongs concerning ethics. Further, there is also
no international consensus on standards of business conduct. However, there are
some core moral rules that should guide each and every one of us, namely to
respect the human dignity, to respect basic rights, and to be a good citizen.
These values apply to the western as well as non-western countries and
especially countries that set up operations in less developed countries which
should respect these values. Therefore, in our opinion foreign companies that
have operations in less developed countries should adhere to western standards,
even if that means reduced profits due to slightly higher wages and better
working conditions. It is morally not justifiable to let workers work in
sweatshops and die because they have limited access to medical care or make
them work more than eighty hours per week in order to survive. Our values and
ethics are strongly influenced by the particular culture we grow up in. So for
managers in large companies, it should be natural to conduct business according
to western standards. They have to respect the respective local traditions, but
should not exploit local workers in order to boost profits.
Moreover, multinational companies should reconsider the incentives
there are sending to their subcontractors and responsible managers. If they
only focus on profit maximization, sooner or later they try to save money by
mistreating workers. Instead, they should emphasize ethical and sustainable
operations. This should be done especially when more advanced companies, such
as Nike, with superior knowledge enter low cost less developed countries. Unfortunately,
this is not always the case. The workers in one of Nike’s subcontractors in
Malaysia, for example, faced very poor working conditions and worked overtime
in order to make a living. Since Nike claims to be a social responsible
corporation, they should at least check the factories from which they source
their products and make sure that all of their business partners comply with
certain working standards. If customers were aware of the conditions of the
workers and knew that, for example child labor was used in the production
process, people who are against child labour would consider buying a
alternative products to Nikes as a result of a difference of interests. In the
90's this is what exactly happened to Nike as a result of this information of
child labour went Nike went public.
Summary:
The example of Nike has shown that a multinational company has to
deal with issues which go far beyond regular business practices. In today's
society, ethical and moral issues determine a companies success more than ever.
The problem is that different cultures interpret moral and ethical behavior
much differently. Often the views collide, and it is difficult to find common
ground.
Nevertheless, we argued that a multinational company needs to take
full responsibility for its actions. As Chase-Dunn (2001) stated, “The
modern world-system has always been, and is still, multicultural, the growing
acceptance of western values of rationality, individualism, equality , and
efficiency is an important trend of the twentieth century” Hence a
multinational enterprise should aim to integrate its home-countries moral and
ethical values as much as possible. It is wrong to exploit people in an
underdeveloped country for the benefit of western consumerism.
EXAM RELEVANT EXTENSION
IGSC
would like to thank our fellow students for the in-depth and thought provoking
comments and we would like to give some feedback on some of the points which
really stuck out to us when reading back over the comments.
A
good point brought up by a fellow student who talked about when human rights
groups raised public awareness on labour conditions in the 90’s in Africa. As a
result many corporations pulled their operations out of Africa causing many
individuals to lose their jobs causing poverty starvation etc. For them, at the
time, their job was very important and crucial for survival. As a western
nation we worry about conditions and they worry about having a job. They don’t
know the standards that are set in the western nations so they believe that this
is normal.
Another
comment made reference to how we should consider that in some of the poorest
counties, like Indonesia, when Nike puts in a factory that even though the
living standards are not up to western standards they are improvements to what
they were living before. Just because the standards are not up to what we could
consider acceptable, doesn’t mean that the workers are in poor conditions. It
is all relative. Also the media has a huge impact on what is done about these
issues. People only hear and see what is really going on in these factories
because of what they see on the TV and read in the news. But in reality, does
the media put a spin on the real story? Do they exaggerate the truth in order
to get a good story and ratings? This is something to think about when
analyzing the impact these MNC have on these countries.
Furthermore
implementation of extraterritorial laws is possible. This is when a nation
attempts to apply its laws to activities outside its own territory. Many MNC
operate from less developed countries because of their relaxed laws and
regulations. It may be more ethical and moral thing to try to implement and
enforce an extraterritorial law, but then this would defeat the purpose of
operating in a different country. If same regulations and laws were imposed
then why would they spend the extra money to move to a different country? They
could then just use the labour supply available in their home country.
The
team was impressed that Nike has implemented and created a whole team to cover
social responsibility in the countries it operates in. Taken from nike.com
“Corporate
& Social Responsibility; What We Offer
If you have a vision for the brand
and a heart dedicated to improving the future of the world around us, a job in
Corporate and Social Responsibility may be the perfect fit. As CR practices
expand, we see the positive impact we can have in our world. Working in
Corporate and Social Responsibility at Nike means you thrive on finding
solutions, using creativity and harnessing innovation. From auditing overseas
factories and setting and measuring ambitious climate neutrality targets to
tackling waste throughout the manufacturing process, we work both within and
across business units to get to the root of problems. Learn more about the jobs
in Corporate and Responsibility with Nike today.”
So when a blogger quotes that
Nike is currently being egotistic this is found to be false. Post mid 2000’s
Nike has taken a stance against the allegation and tried to improve their
credibility and status.
Another
interesting point which was made was that if child labour was abolished today
this could be more detrimental to the individuals affected by child labour than
if it was allowed to continue, this team in fact agrees with this fact.
If
child labour was outlawed right now many families would be left unable to
support themselves and be left starving, even though it is a terrible decision
to make but this team felt that it was important for a family to be able to eat
an survive rather than the child receive an education. However in the 21st
century this choice should never have to made and child labour must be
eradicated not through immediately banning this form of labour but through
MNC’s working with the governments of these nations and coming up with a
strategy together so that children of poor families can receive an education in
order to give them a shot at a real career while not leaving their family with
no food through some form of government initiative. Sadly this team is aware
that this will be no easy task to complete and will take a considerable amount
of time.
Lastly
the final point brought up in which we wold like to address stated
foreign-owned and subcontracting manufacturing companies in low cost labour
countries today tend to pay higher wages than local firms. This is in fact true
in some cases and this was in fact mentioned in one our earlier blogs; it was
found that individuals working in the foreign owned factories such as Nike
could be earning three times as much as those working in the government run
factories and after three years in foreign owned factory employment could
actually be able to afford a car in order to drive to work. The data found to
support this was from one occasion in Vietnam and by no means can we generalise
across all foreign owned factories that they will pay higher wages and have
better working conditions than the local factories but on some occasions yes
this is indeed true.
On a final note we must not forget that on the occasions
in which foreign owned factories do outperform their local counterparts this is
only on a relative basis and the conditions and pay are still far from the
desirable level in which many employment rights campaigners are looking for.
Works Cited
Beach, E. (2011). Facts About Nike Sweatshops. Retrieved
March 2, 2012, from eHow money:
http://www.ehow.com/about_5485125_nike-sweatshops.html
Cavett-Goodwin, D. (2007, December 3). Making the Case for
Corporate Social Responsibility. Retrieved March 2, 2012, from Cultural
Shifts: http://culturalshifts.com
Chase-Dunn, C. K. (2011). Chapter 7 - Globalisation: A World
System Perspective. In J. V. Ciprut, Of Fears and Foes : Security and
Insecurity in an Evolving Global Political Economy (pp. 119-140). /:
Praeger.
Elashmawi, F., & Harris, P. R. (1993). Multicultural
Management - New Skills for Global Success. Gulf Publishing Company , 63.
Donaldson, T. (1996). When is different just different and when is
different wrong? . Harvard Business Review , 48-54.
Global Exchange. (2011). Nike FAQs. Retrieved March 2,
2012, from Global Exchange: http://www.globalexchange.org/sweatfree/nike/faq
O'Rouke, D. (2001, February 27). To Fix Sweatshop Conditions in
Factories, We Must Listen to Workers. Retrieved March 2,
2012, from The Boston Globe:
http://nature.berkeley.edu/orourke/media/globe-op-ed.html
Pei, M. (2007). Corruption Threatens China's Future. Carnegie , 1-8.
Pitta, D. A., Fung, H.-G., & Isberg, S. (1984). Ethical issues
across cultures: managing the differing perspectives of China and the USA. Journal
of Consumer Marketing , XVI, 240-256.
Religion Facts. (2004, 02 20). Confucianism. Retrieved
March 2, 2012, from Religion Facts:
http://www.religionfacts.com/a-z-religion-index/confucianism.htm
IGSC provides good analysis to the dilemma of MNC faced on cost advantage and corporate ethics by illustrating the example of Nike. I do not think the cause of exploitation is ‘to respect the local tradition’ mentioned by IGSC. Cultural dimension, collectivism could not be the answer of the ill-designed employment practices in less-developed countries. Difference in cultural dimension (ie. individualism v. collectivism) only implies management approaches and working styles vary across nations. However, acceptable work conditions, safety work environment and reasonable pay are universally accepted as provision for basic human needs and human rights to workers, just like the freedom of speech. The implication of cultural dimension should be the response of workers towards exploitation. In high power distance countries like China and Indonesia, workers resist to openly challenge the employer. Low-skilled workers have minimal influence on company policies and day-to-day operations. Dissatisfied workers adopts an ‘exit’ response rather than a ‘voice’ response. The high level of respect to status and upper management leads to persistent tolerance to unacceptable work conditions and inability to bargain for improvement. In low power distance countries, open communication between workers and management is possible so that proposing changes in employment issues through grievance procedures, negotiation, industrial action and arousing media concern to work condition are practical.
ReplyDeleteIt would be perfect if IGSC could further recommend solutions that are feasible to regulate MNCs or resolve the problem. For instance, there is extraterritorial law in western countries. Laws apply not only within the country of jurisdiction. Laws of US are also enforceable overseas to restrict the behavior of US-founded corporation. Under Foreign Corrupt Practices Act, U.S. made it illegal for Chinese subsidiary of US-based firm to influence foreign officials through personal payment or political contributions. IGSC could consider the possibility for using extraterritorial law so that US employment law to be enforceable to less-developed countries and the extent of its application.
IGSC provides good analysis to the dilemma of MNC faced on cost advantage and corporate ethics by illustrating the example of Nike. I do not think the cause of exploitation is ‘to respect the local tradition’ mentioned by IGSC. Cultural dimension, collectivism could not be the answer of the ill-designed employment practices in less-developed countries. Difference in cultural dimension (ie. individualism v. collectivism) only implies management approaches and working styles vary across nations. However, acceptable work conditions, safety work environment and reasonable pay are universally accepted as provision for basic human needs and human rights to workers, just like the freedom of speech. The implication of cultural dimension should be the response of workers towards exploitation. In high power distance countries like China and Indonesia, workers resist to openly challenge the employer. Low-skilled workers have minimal influence on company policies and day-to-day operations. Dissatisfied workers adopts an ‘exit’ response rather than a ‘voice’ response. The high level of respect to status and upper management leads to persistent tolerance to unacceptable work conditions and inability to bargain for improvement. In low power distance countries, open communication between workers and management is possible so that proposing changes in employment issues through grievance procedures, negotiation, industrial action and arousing media concern to work condition are practical.
ReplyDeleteIt would be perfect if IGSC could further recommend solutions that are feasible to regulate MNCs or resolve the problem. For instance, there is extraterritorial law in western countries. Laws apply not only within the country of jurisdiction. Laws of US are also enforceable overseas to restrict the behavior of US-founded corporation. Under Foreign Corrupt Practices Act, U.S. made it illegal for Chinese subsidiary of US-based firm to influence foreign officials through personal payment or political contributions. IGSC could consider the possibility for using extraterritorial law so that US employment law to be enforceable to less-developed countries and the extent of its application.
Hi IGSC,
ReplyDeleteI think your group has brought up a rather interesting topic about being ethical in their business operations, which many Multinational Corporations (MNC) around the world face. Indeed Nike is indeed a brand a corporation which we are all too familiar with. Those ticks on the shoes, shirts, shorts, bags and even accessories are a sight we cannot miss. It is undeniably true how Nike has done such a good job with the marketing and branding campaign that when we see a TICK we immediately associate with NIKE.
Having highlighted the issues about Nike and the operations it ventures in the various Asian countries, it is tricky how we as individuals should view our comments on them. From a business perspective, we would say they are smart to set up shop in these countries as the labour cost is cheap but the problems it carries long seems to put Nike in the bad light indirectly.
Human rights and activist are always quick to pin point the weaknesses of corporations like Nike but the truth is can they help it. Often discussed are topics regarding exploiting child labours, under paying them and even not offering them proper sleeping quarters. I think we have to understand how the organisations themselves are making an effort to tackle these problems in the first place. Taking a reference point from the blog, Nike for this instance, it is mentioned that they underpay the workers and also not provide them with proper sleeping quarters in Indonesia. Before we fire the arrows across and put the blame on Nike we should really look at the local governments and assess them first.
Look at Indonesia for example, their annual growth domestic product (GDP) is not even 1/10 compared to the developed countries in the world. If we examine the states where Nike set up their operations, you may even find it shockingly true that the people are so poor and not properly taken care of even before Nike set up their operations. The other issue would be the media, well though we say a picture speaks a thousand words but you will never understand an environment until you are there. Most of the times we are misled by the media, they capture pictures which are pretty intriguing and one-sided.
Pictures depicting Nike’s operation plants, but if we ask ourselves truly, is Nike really obligated to provide a living quarter? Though we blame Nike for all this but they have indeed done up some clean up job to improve the lives of many. Partnering with external suppliers is also a tricky matter. How your supplier manages its own employees is a thin line. Cause Nike has really became so big to go unnoticed. Being big has also it consequences but that does not mean that Nike should be responsible and be part of the firing squad. If we look at the most recent case about Apple who has business tidings with Foxconn a Taiwanese firm which produces chips for them, we saw how Apple was blatantly dragged into the whole ugly episode.
The matter of fact we all know is that the real blame should be shifted on Foxconn and not Apple and we wonder why, because Apple has really gone to big too, to be gone unnoticed. The other factor which has caused such a stir about this issue would certainly be centred with the effects of western influence and beliefs. As Asians we are undeniably expose to a wide range of western influence from the daily by-products to the music we listen. Yes human rights is important but when we say Nike is really scrupulous in using child-labour are doing much more harm to this child labours or are we really helping to give them a better live.
2nd part:
ReplyDeleteImagine Nike cave in to the western beliefs of opposing or not even work with suppliers that uses child labours and pull out all its operations. What would really happen if these kids no longer receive incomes to support their families or even feed themselves? Picture with me a thousand kids stretching out for food and not a single drop of grain of rice could be found. Are we really helping them or are we killing them just because we felt our beliefs were right. I think what really is important is to go by the saying; “Do what the Romans do in Rome”. What may seem to fit us may not fit others after all.
Check out this video on Bangladeshi workers trying to survive in a foreign land because their own country could never give them an employment. Though it is tough but they still do the job, all in the name of survival and family.
(http://www.youtube.com/watch?v=Fc6WlEf27ic&feature=share)
Hi, IGSC!Nike is a good example to talk about ethic dilemma. I agree with your group that Nike is unethical because they deprive workers. Nevertheless, I want to explain why Nike is unethical by other perspectives which are not mentioned by your group.
ReplyDeleteIn my opinion, I think Nike is unethical even though Nike does obey the law.
First of all, in terms of virtual ethics which consist of trust, empathy, truthfulness etc, Nike fails to maintain his integrity. As your group mentioned that Nike promises to do more than what is required as well as what is expected to be a leader. However, Nike’s action reveals that they are just doing what is required. For example, Nike required workers to work 7 days per week. In the other words, they have no rest day. Though it is lawful to do so, it is should not be done by a leader. As a market leader, people expect them to treat workers in a better way. Therefore, it shows that Nike fails to keep his promise in his ethical commitment. When we see Nike from view of virtual ethics, it shows that Nike is not worthwhile to trust and thus it is not ethical.
Moreover, according to a conceptual corporate moral development model (by R. Eric Reidenbach Donald P. Robin) including 5 stages of moral, the highest level is ethical, followed by emerging ethical, responsive, legalistic and amoral. Amoral means people would do anything at any cost in order to gain profit. Legalistic means once the action is legal, they would do it to gain profit. For responsive, people would be ethical if it is profitable. For emerging ethical, people would seek greater balance between ethic and profit. Finally, for ethical, company would highly accept common set of ethical value and add them in the company culture. In Nike case, it is obvious that Nike is placed between legalistic and responsive as Nike obeys the laws but they did for profit. Even though Nike sometimes do a little more than legal requirement like they offered US$30 hourly wage for workers in Indonesia while the legal requirement is US$26 only (mentioned by your group), Nike did it because it could increase their profit via having a better image. As a result, Nike is not ethical in this sense.
Reference
(1) R. Eric Reidenbach Donald P. Robin (1991) A conceptual model of corporate moral development
This was a interesting and informative discussion on child labour and the Nike case.
ReplyDeleteUltimately a company’s CSR policies will depend on the end consumer’s perception of right and wrong. You mentioned the boycott against Nike products in the 90s when consumers became aware of the child labour. As always, the moral of the story will never be simple and in for example Africa, the flipside of the coin was felt in the same era when human rights groups raised public awareness on labour conditions. The concern of western consumers caused western corporations to move their production away from countries that were seen to be too controversial, which effectively caused unemployment as well as a higher concentration of government control over the workforce (mainly through corrupt state owned or supported companies). This coincided with the end of the cold war which basically ceased Soviet and US financial aid to Africa and opened up for Chinese untied aid to ‘overtake’ the continent and cause damage to the development of human rights that western institutions such as IMF proclaim they have worked for (Research found that untied aid has high potential of bringing negative adverse effects for democracy and the respect of human rights. This effect is due to the untied nature of the aid in an environment with weak democracy and respect for the rule of law, not the origin of the aid itself, Keenan 2008). With this example I want to highlight that pulling away from an ‘unethical’ business environment might make more damage than good.
Personally, I believe all actors are responsible and should be held accountable for their contributions to the society and human life in the region they are active. No individual or company should knowingly advantage on the expense of others. In the business sense this translates to looking at the firm’s effect on all stakeholders. In the long term a profitable business model is advantageous to everyone involved but without mutual respect the collective benefits will not be long-standing. What it comes down to is the power to change that is extracted from control (either direct or through influence). Institutions, individuals and corporations have a responsibility towards the less fortunate to make sure their impact is of a positive kind and that the effects remain positive throughout the supply chain.
The discussion of the responsibility to serve the greater good inevitably turns into the question of why evil is allowed to exist in the world and why ‘good’ is so hard to find (not to mention the question of how to even define these concepts). But what if power is not a priority of the truly good – will this equilibrium ever change?
Keenan, P.J. (2008) Curse or Cure? China, Africa and the Effects of Unconditioned Wealth, BERKELEY JOURNAL OF INTERNATIONAL LAW, Vol. 27.1 2008
This was an interesting and informative discussion on child labour and the Nike case.
ReplyDeleteUltimately a company’s CSR policies will depend on the end consumer’s perception of right and wrong. You mentioned the boycott against Nike products in the 90s when consumers became aware of the child labour. As always, the moral of the story will never be simple and in for example Africa, the flipside of the coin was felt in the same era when human rights groups raised public awareness on labour conditions. The concern of western consumers caused western corporations to move their production away from countries that were seen to be too controversial, which effectively caused unemployment as well as a higher concentration of government control over the workforce (mainly through corrupt state owned or supported companies). This coincided with the end of the cold war which basically ceased Soviet and US financial aid to Africa and opened up for Chinese untied aid to ‘overtake’ the continent and cause damage to the development of human rights that western institutions such as IMF proclaim they have worked for (Research found that untied aid has high potential of bringing negative adverse effects for democracy and the respect of human rights. This effect is due to the untied nature of the aid in an environment with weak democracy and respect for the rule of law, not the origin of the aid itself, Keenan 2008). With this example I want to highlight that pulling away from an ‘unethical’ business environment might make more damage than good.
Personally, I believe all actors are responsible and should be held accountable for their contributions to the society and human life in the region they are active. No individual or company should knowingly advantage on the expense of others. In the business sense this translates to looking at the firm’s effect on all stakeholders. In the long term a profitable business model is advantageous to everyone involved but without mutual respect the collective benefits will not be long-standing. What it comes down to is the power to change that is extracted from control (either direct or through influence). Institutions, individuals and corporations have a responsibility towards the less fortunate to make sure their impact is of a positive kind and that the effects remain positive throughout the supply chain.
The discussion of the responsibility to serve the greater good inevitably turns into the question of why evil is allowed to exist in the world and why ‘good’ is so hard to find (not to mention the question of how to even define these concepts). But what if power is not a priority of the truly good – will this equilibrium ever change?
Keenan, P.J. (2008) Curse or Cure? China, Africa and the Effects of Unconditioned Wealth, BERKELEY JOURNAL OF INTERNATIONAL LAW, Vol. 27.1 2008
Being in the business of “marketing shoes” is not an excuse for accepting unethical treatment of employees. I agree with your moral standpoint on it being imoral to exploit foreign markets to source consumer goods. I really appreciate your discussion around child labour; it shows great insight in the matter and brings up several interesting points. I think child labour should be heavily sanctioned, consumers should simply refuse to purchase from suppliers utilizing child labour. This is in my opinion the most direct and efficient method, striking at the core of the issue. This does however create questions and problems in regards to whom should succeed this workforce. But this is in my opinion a completely different discussion – children deserve a childhood and should not be utilized as sources of cheap labour. However, as you pointed out, this position might simply be my cultural standpoint and should as such not be seen as universally applicable.
ReplyDeleteHowever, I believe companies having these kinds of operations need to take greater consideration of utilitarian perspectives and stakeholder theory. As such, they should consider the effects of their actions on everyone involved in the business relationship. Being a powerhouse in the reatail market, Nike has a great power to push their suppliers and push for better working condiditons for sweatshop workers.
Acting as a leader in this matter makes good sense, not only from a utilitarian perspective, but also from a resourcebased view. As CSR is getting evermore important, Nike need to safeguard their image and brand reputation to maintain their market position.
In addition, this should not mearly be a stab affecting conditions at specific sweatshops, but the actions of known and influential players such as Nike ought to be used to drive a global change, raising the bar for working conditions and establishing a global code of conduct for all players in the business.
As globalization is gathering evermore momentum, we need to safeguard fundamental values such as human rights and dignity. In a globalized world, we need to reinstate a new order: one that seeks to increase the wealth of others. It is not acceptable to relocate operations to leverage low salaries and production costs if it means exploiting people. This form of neo-imperialism should not be accepted in a fairly enlightened society such as our own. One can not blame the lack of information anymore, nor keep eyes closely shut. That would be deeply immoral and inexcusable. This is not a discussion about political views or faculties, but about fundamental values and dignity. We need a global code of conduct in regards to working conditions and minimum levels on CSR efforts.
Hey IGSC,
ReplyDeleteThank you very much for this article and for the very interesting in class presentation.
This case is the perfect example of what globalization shouldn't be and why it is often see as a huge threat for human rights. What is a purpose for a western company which is selling good in western countries to implement factories in developing nations if it is not to exploit poor working conditions. This case is of course very extreme.
It perfectly shows the dilemma which is facing the manager stubbled between the company interest, his own morality and the shareholder interest.
According to me, this situation is the sad result of the growing power of finance that has started in 1970's. The power has moved from the direction of the companies, the managers, who were focused on making companies grow bigger (long term view) to the shareholders who are more focused on increasing the financial result, the profit in short term without any care for the future of the company, its employees and sometimes its interests. This lack of morality is more linked to the competition between companies on the financial markets (Wall Street) to find investors to secure their capital structure more than on the traditional markets (Main Street), where customers make a rational choice of purchasing or not a product depending on quality and price.
As you put it out in class presentation, the solution to the lack of morality in globalized systems of productions and often consumption is to increase the awareness of customers. As individuals, we need to have the information on how, where by who products are designed and produced in order to influence it by purchasing a product or not. Moreover, with quality, brand and price, the moral commitment and social behavior of a company, as well as environmental/social fallout of the consumption of a product, should be integer in our consumption choice. This is a costumer commitment that can definitely influence the decision making process of managers and compensate the power of profit. By adopting rational and moral consumption preferences, we could, as individuals replace the power on the traditional market (Main street vs wall street ;) )
I hope my argument is understandable.
I am afraid that customers already made their choice and accept this kind of un ethical behavior in exchange of low prices.
FX
Hey IGSC,
ReplyDeleteThank you very much for this article and for the very interesting in class presentation.
This case is the perfect example of what globalization shouldn't be and why it is often see as a huge threat for human rights. What is a purpose for a western company which is selling good in western countries to implement factories in developing nations if it is not to exploit poor working conditions. This case is of course very extreme.
It perfectly shows the dilemma which is facing the manager stubbled between the company interest, his own morality and the shareholder interest.
According to me, this situation is the sad result of the growing power of finance that has started in 1970's. The power has moved from the direction of the companies, the managers, who were focused on making companies grow bigger (long term view) to the shareholders who are more focused on increasing the financial result, the profit in short term without any care for the future of the company, its employees and sometimes its interests. This lack of morality is more linked to the competition between companies on the financial markets to find investors to secure their capital structure more than on the traditional markets, where customers make a rational choice of purchasing or not a product depending on quality and price.
As you put it out in class presentation, the solution to the lack of morality in globalized systems of productions and often consumption is to increase the awareness of customers. As individuals, we need to have the information on how, where by who products are designed and produced in order to influence it by purchasing a product or not. Moreover, with quality, brand and price, the moral commitment and social behavior of a company, as well as environmental/social fallout of the consumption of a product, should be integer in our consumption choice.
I hope my argument is understandable.
I'm afraid costumers already made a choice in favor of price and accept unethical practices in order to obtain it. Far from filling concerned, they prefer not to know what is happening in factories.
FX
Although I always know that some MNCs have the habits of mistreating their labors in developing countries, I am still very shocked to know how Nikes is taking advantages of different laws and conditions in other countries, and denying their responsibility by staying aloof to claim that they are only a buyer, not producer, in order to escape from ethnical accusation and maximize their own profits. It’s humiliating to see the contrary on what they have written on the code of conflict and what they actually do. You have mentioned that Nikes has adopted the local values rather than enforcing their own values, here I would like to present some reasons behind.
ReplyDeleteTo use the egoism approach we learnt in class, Nikes is very much a self-centered entity. They only care about their own interest, and will use whatever channels to achieve their target. An egoist is always lack of empathy. According to Oxford dictionary, “empathy” means the ability to understand and share the feelings of another. If a person is lack of empathy, he usually has double standard to judge himself and other people. For example, managers of Nikes have double standard in their moral judgment. They will not accept 40 hours overtimes in their hometown but rationalize this practice in developing countries. If they have empathy, they will impose the same moral standard to everywhere, despite of different cultures and values.
Therefore, a company which is egoist always neglects its corporate social responsibility. From the passage "Making the case for corporate social responsibility" by David Cavett-Goodwin, Corporate social responsibility is getting more important in the business world. Some conventional wisdom would assume that CSR is a zero-sum tradeoff with the profitability, but some academic thought suggests that "those companies, who appear to be more responsible in the areas of environment and social behavior, would attract more investors, and therefore perform better financially." Therefore, if Nikes is trying to take up more social responsibility, I believe it will have better company image as well as better performance.
All in all, I really appreciate your blog as it provides a vivid example of labor exploitation in an international scope. I remember that you have shown us some comics in class, it would make your blog more creative and attractive if you put them in your blog as well.
Reference:
David Cavett-Goodwin (2007). Cultural Shifts: Making the case for corporate social responsibility. Retrieved March 07, 2012 from http://culturalshifts.com
This comment has been removed by the author.
ReplyDelete“The modern world-system has always been, and is still, multicultural; the growing acceptance of western values of rationality, individualism, equality, and efficiency is an important trend of the twentieth century”. This quote is exactly why foreign countries adhere to maintain cheap wages for their workers. They are adopting the Western views of thinking about maximizing profits for themselves, just as much as Western countries are looking out for the triple bottom line. But on top of that, globalization forces large companies to evade expensive western ethics, and use cheap labor just to stay afloat, and survive. If they didn’t, another company would exploit that resource that Nike or any other company gave up due to western view of moral ethics, and would dominate their position. So if one looks at it from a different angle, it is an unfortunate never ending battle that is in progress just to survive in this multinational, globalized world. If companies have to increase wages, they would just relocate to a different country to continue production, and the former laboring country would be worse off than before.
ReplyDeleteAs far as child labor goes in your article, you stated “that each worker must cover the needs of his family, a minimum of 664,000 Rupiah per month is necessary” but each worker only gets paid a legal “minimum wage per month… 231,000 Rupiah (US$26)”. With monthly earnings like that it makes it inevitable for the country to have collectivist morals and views. Not only China, but almost every poor country in the world has the same views on the entire family contributing to their survival. A study by Avert showed that the legal age of consent for Angola is 12, so just imagine how old do their youth begin to help support the family, they don’t work, they don’t eat. Poor country’s children are forced by circumstances to mature mentally very young and fast, with extreme responsibility to help support the family – especially if it’s a boy. I agree with the improvement of working conditions, hours, and proper forms of education for the workers, standing from a feminist point of view for the eradication of oppression. Especially with the part where you mentioned in class that companies like Nike should provide proper schooling for these people, especially the youth, to aid them in being able to think their way out of poverty. But if a young person has to work to support his/her family to survive then he/she has to so what they have to do to survive. Just imagine if that little bit of extra income is what kept the lowest form of shelter over your families head, and the smallest amount of food in your stomach just to fight of the hunger pains, how would you feel about child labor then?
World Wide Age of Consent. (2011). Avert. http://www.avert.org/age-of-consent.htm
40041781HighlyAdaptable
Student ID 40040422
ReplyDeleteThis was an interesting and informative discussion on child labour and the controversy surrounding Nike.
Ultimately a company’s CSR policies will depend on the end consumer’s perception of right and wrong. You mentioned the boycott against Nike products in the 90s when consumers became aware of the child labour. As always, the moral of the story will never be simple and in for example Africa, the flipside of the coin was felt in the same era when human rights groups raised public awareness on labour conditions. The concern of western consumers caused western corporations to move their production away from countries that were seen to be too controversial, which effectively caused unemployment as well as a higher concentration of government control over the workforce (mainly through corrupt state owned or supported companies). This coincided with the end of the cold war which basically ceased Soviet and US financial aid to Africa and opened up for Chinese untied aid to ‘overtake’ the continent and cause damage to the development of human rights that western institutions such as IMF proclaim they have worked for (Research found that untied aid has high potential of bringing negative adverse effects for democracy and the respect of human rights. This effect is due to the untied nature of the aid in an environment with weak democracy and respect for the rule of law, not the origin of the aid itself, Keenan 2008). With this example I want to highlight that pulling away from an ‘unethical’ business environment might make more damage than good.
Personally, I believe all actors are responsible and should be held accountable for their contributions to the society and human life in the region they are active. No individual or company should knowingly advantage on the expense of others. In the business sense this translates to looking at the firm’s effect on all stakeholders. In the long term a profitable business model is advantageous to everyone involved but without mutual respect the collective benefits will not be long-standing. What it comes down to is the power to change that is extracted from control (either direct or through influence). Institutions, individuals and corporations have a responsibility towards the less fortunate to make sure their impact is of a positive kind and that the effects remain positive throughout the supply chain.
The discussion of the responsibility to serve the greater good inevitably turns into the question of why evil is allowed to exist in the world and why ‘good’ is so hard to find (not to mention the question of how to even define these concepts). But what if power is not a priority of the truly good – will this equilibrium ever change?
Keenan, P.J. (2008) Curse or Cure? China, Africa and the Effects of Unconditioned Wealth, BERKELEY JOURNAL OF INTERNATIONAL LAW, Vol. 27.1 2008
Student ID 40040422
ReplyDeleteThis was an interesting and informative discussion on child labour and the controversy surrounding Nike.
Ultimately a company’s CSR policies will depend on the end consumer’s perception of right and wrong. You mentioned the boycott against Nike products in the 90s when consumers became aware of the child labour. As always, the moral of the story will never be simple and in for example Africa, the flipside of the coin was felt in the same era when human rights groups raised public awareness on labour conditions. The concern of western consumers caused western corporations to move their production away from countries that were seen to be too controversial, which effectively caused unemployment as well as a higher concentration of government control over the workforce (mainly through corrupt state owned or supported companies). This coincided with the end of the cold war which basically ceased Soviet and US financial aid to Africa and opened up for Chinese untied aid to ‘overtake’ the continent and cause damage to the development of human rights that western institutions such as IMF proclaim they have worked for (Research found that untied aid has high potential of bringing negative adverse effects for democracy and the respect of human rights. This effect is due to the untied nature of the aid in an environment with weak democracy and respect for the rule of law, not the origin of the aid itself, Keenan 2008). With this example I want to highlight that pulling away from an ‘unethical’ business environment might make more damage than good.
Personally, I believe all actors are responsible and should be held accountable for their contributions to the society and human life in the region they are active. No individual or company should knowingly advantage on the expense of others. In the business sense this translates to looking at the firm’s effect on all stakeholders. In the long term a profitable business model is advantageous to everyone involved but without mutual respect the collective benefits will not be long-standing. What it comes down to is the power to change that is extracted from control (either direct or through influence). Institutions, individuals and corporations have a responsibility towards the less fortunate to make sure their impact is of a positive kind and that the effects remain positive throughout the supply chain.
The discussion of the responsibility to serve the greater good inevitably turns into the question of why evil is allowed to exist in the world and why ‘good’ is so hard to find (not to mention the question of how to even define these concepts). But what if power is not a priority of the truly good – will this equilibrium ever change?
Keenan, P.J. (2008) Curse or Cure? China, Africa and the Effects of Unconditioned Wealth, BERKELEY JOURNAL OF INTERNATIONAL LAW, Vol. 27.1 2008
Hello. Great job and interesting reading about Nike.
ReplyDeleteAt first when i hear about child labour i think its totally wrong. A child should have a childhood, play and have fun. However if you take a look at the circumstances there may be times when there is no other option than to send a child to work. Since its always good to look at things from a relative perspective then perhaps its better for a young girl to work in a fabric than be used as a sex slave. However its not right for big multinationals to take advantage of this people just because they are poor and dont have anywhere else to go. Instead they should take better care and really work on their CSR. It is the big companies that can make a difference.
Actually I dont agree with you that if we know nike uses child labour we should buy more and then they will have more salary. I believe that the Buyer Is King and can really influence the company. If thousands of consumers decide to boycott a company because it is using child labour then they would actually start to react.
I once did a case study on H&M to find out more about their code of conduct. As they have subcontractors who make their clothes they wand to make sure there is good conditions in the fabrics. So sometimes staff from H&M goes out to the fabrics to see how the environment is but often the fabrics are told in advance that H&M will pay a visit and then the leader of the fabric threatens the workers to say that everything is fine, when its not. And also in many cases the subcontractors often have other subcontractors so its hard for H&M to controll if they really are using child labour or not.
It is really a moral issue and companies should focus on making the world to a better place since they really can make an impact. Instead they are greedy and just focus on the proft.
Nice job, and a very befitting article to address one of the most prevalent moral business issues of our century.
ReplyDeleteThis article correctly emphasizes the dilemma that because cultures and moral standards do vary from place to place, and as Thomas Donaldson has said, "No culture's ethics are better than any other's", it is certainly quite ambiguous as to which ethical standards an MNC must adhere to whilst conducting business in other countries. But this ambiguity does not serve as, and must not become, excuses for multinational corporations with the full ability to protect the prevailing and unalienable human rights of their workers and workers of their suppliers not to do so. In these sweatshops, their work, and the horrid working conditions are betraying the very thing that these workers are slaving for; life. These men, women and children have a right to life as much as any north american or any citizen of the developed world does. They have a right not to be exposed to toxins that shorten their lives, and a right to enjoy the company of the family that they have worked so hard to feed. These rights should not be sacrificed for shoes that they themselves will never get to wear. What I am saying is that the moral dilemma as to which cultural standard should be followed, such as whether bribery should be accepted or not, only exists after the universal human rights of the employees have been respected, which is not the case in this story.
As the article has mentioned child labor, I would like to bring a new angle to the subject. It has been said that after people have realized that Nike has been hiring children to produce their shoes, they have stopped purchasing Nike shoes for other alternatives. But let me ask a quetion; If child labor could instantaneously be abolished in these third world countries right now, would it be of benefit to the children and their families? Sometimes the revenues that these children bring home are the only way that the children, and their families survive. If the children's very means of survival, their employment, is taken away without any sort of alternative assistance from the government, (which is the case in most third world countries), these children would basically die. So the sad reality is, the poor economic conditions of these countries have created an unfortunate environment where child labor is necessary. In this case, the problem is not the employment of children itself, which keeps the children alive, but the treatment and conditions in which these children work. If the MNC's can somehow ensure that these children are not exposed to hazardous materials, and that they are not physically and sexually abused, and as ambitious as it may sound, that they get time off work to play and enjoy being children, maybe a middle ground can be found where the use of child labor is not as diabolical as it initially sounds.
Hi IGSC
ReplyDeleteInteresting topic as the phenomena with the so-called “Sweatshops” is a widely discussed subject when it comes to CSR and ethics.
Off course it could be argued that Nike have no obligation and can not be held accountable for working conditions in the factories since they are under OEM agreement and not owned by Nike. Still the perception of what’s regarded as ethical and not is universal. Even though there are differences in local regulations and rules in different countries MNC:s today are required to take action against unethical working conditions.
One have to remember that huge MNC:s possess a great deal of bargaining power which means that they can make requirements and put pressure on local manufacturers. Even though it could be argued that Nike don’t have obligations it is still needed to maintain the possessiveness of the Nike brand. Today Nike are currently spending 25 million dollar a year on CSR activities. Still if there are existing abuse like child-labor and inhumane working conditions this hardly makes up for it. This means that its somehow required for big MNC:s to make sure that workers get paid a wage that is descent and not beneath the level of starvation. Today it’s often also required of OEM:s to move towards better standards to fit in the value-chains of MNC:s.
But even though Nike, as many other MNC:s, are not respecting international guidelines of working conditions in the extent as they should, one must bare in mind that huge MNC:s also get criticized and the benefit of them are forgotten. Apparently some empirical data suggests that foreign-owned and subcontracting manufacturing companies in low cost labor countries today tend to pay higher wages than local firms. In many cases there would not be any work opportunities without MNC:s. Therefore Nike and other big MNC:s are not the only one to blame. The first step might rather be to raise the overall economy in these countries. In recent decades, MNCs are also contributing to economic growth in these countries as a result of foreign direct investment and by raising productivity. Hence, influence and pressure from international organizations regarding global standards is required to encourage local governments to raise wages. By helping developing economies and raise overall economy this is one way to make an impact in a long-term perspective. Still when it comes to the child-labor and working hour questions MNC:s definitely bares a responsibility that cannot be overseen, more responsibility than wages in my opinion.
http://www.munich-business-school.de/intercultural/index.php/MNCs_impact_on_labour_conditions_in_developing_countries
IGSC would like to thank our fellow students for the in-depth and thought provoking comments and we would like to give some feedback on some of the points which really stuck out to us when reading back over the comments.
ReplyDeleteA good point brought up by a fellow student who talked about when human rights groups raised public awareness on labour conditions in the 90’s in Africa. As a result many corporations pulled their operations out of Africa causing many individuals to lose their jobs causing poverty starvation etc. For them, at the time, their job was very important and crucial for survival. As a western nation we worry about conditions and they worry about having a job. They don’t know the standards that are set in the western nations so they believe that this is normal.
Another comment made reference to how we should consider that in some of the poorest counties, like Indonesia, when Nike puts in a factory that even though the living standards are not up to western standards they are improvements to what they were living before. Just because the standards are not up to what we could consider acceptable, doesn’t mean that the workers are in poor conditions. It is all relative. Also the media has a huge impact on what is done about these issues. People only hear and see what is really going on in these factories because of what they see on the TV and read in the news. But in reality, does the media put a spin on the real story? Do they exaggerate the truth in order to get a good story and ratings? This is something to think about when analyzing the impact these MNC have on these countries.
Furthermore implementation of extraterritorial laws is possible. This is when a nation attempts to apply its laws to activities outside its own territory. Many MNC operate from less developed countries because of their relaxed laws and regulations. It may be more ethical and moral thing to try to implement and enforce an extraterritorial law, but then this would defeat the purpose of operating in a different country. If same regulations and laws were imposed then why would they spend the extra money to move to a different country? They could then just use the labour supply available in their home country.
The team was impressed that Nike has implemented and created a whole team to cover social responsibility in the countries it operates in. Taken from nike.com
“Corporate & Social Responsibility; What We Offer
If you have a vision for the brand and a heart dedicated to improving the future of the world around us, a job in Corporate and Social Responsibility may be the perfect fit. As CR practices expand, we see the positive impact we can have in our world. Working in Corporate and Social Responsibility at Nike means you thrive on finding solutions, using creativity and harnessing innovation. From auditing overseas factories and setting and measuring ambitious climate neutrality targets to tackling waste throughout the manufacturing process, we work both within and across business units to get to the root of problems. Learn more about the jobs in Corporate and Responsibility with Nike today.”
So when a blogger quotes that Nike is currently being egotistic this is found to be false. Post mid 2000’s Nike has taken a stance against the allegation and tried to improve their credibility and status.
Another interesting point which was made was that if child labour was abolished today this could be more detrimental to the individuals affected by child labour than if it was allowed to continue, this team in fact agrees with this fact.
ReplyDeleteIf child labour was outlawed right now many families would be left unable to support themselves and be left starving, even though it is a terrible decision to make but this team felt that it was important for a family to be able to eat an survive rather than the child receive an education. However in the 21st century this choice should never have to made and child labour must be eradicated not through immediately banning this form of labour but through MNC’s working with the governments of these nations and coming up with a strategy together so that children of poor families can receive an education in order to give them a shot at a real career while not leaving their family with no food through some form of government initiative. Sadly this team is aware that this will be no easy task to complete and will take a considerable amount of time
Lastly the final point brought up in which we wold like to address stated foreign-owned and subcontracting manufacturing companies in low cost labour countries today tend to pay higher wages than local firms. This is in fact true in some cases and this was in fact mentioned in one our earlier blogs; it was found that individuals working in the foreign owned factories such as Nike could be earning three times as much as those working in the government run factories and after three years in foreign owned factory employment could actually be able to afford a car in order to drive to work. The data found to support this was from one occasion in Vietnam and by no means can we generalise across all foreign owned factories that they will pay higher wages and have better working conditions than the local factories but on some occasions yes this is indeed true.
On a final note we must not forget that on the occasions in which foreign owned factories do outperform their local counterparts this is only on a relative basis and the conditions and pay are still far from the desirable level in which many employment rights campaigners are looking for.
Kind Regards,
IGSC